"Social media analytics should not be seen as a standalone activity"
Businesses are increasingly using social media tools and platforms to enhance visibility and improve customer interaction. In an exclusive interaction with CXOtoday, Pritha Choudhuri, CEO - Analytics Quotient shares some key insights on social media analytics and how it can help the enterprise in making informed decisions.
What according to you are the key factors driving the adoption of social media in the enterprise?
Today, social media has become a key driver in creating customer engagement. We can see a whopping 98 percent of the US population uses facebook. The online population in India is also very proactive, even though the market is maturing. With a chunk of the global population using this platform to share their opinion, feedback and feelings, businesses are also leveraging this opportunity. Enterprises have realised that social media can be a vital tool for a two-way communication between businesses and their customers. This communication gives companies the opportunity to not only increase their customers’ engagement, but also loyalty if handled correctly. Businesses now see social media as an active platform, which cannot be ignored. For them, it is a good form of advertising and an effective way to convey their message and track customer engagement.
How important is social media analytics for businesses to make informed decisions? What should industries look at in this context to decide the future course of action?
Social media analytics is the practice of gathering data from social media websites, such as Twitter, Facebook and Digg and analyse that data to inform business decisions. Therefore, it has an important role to play to make informed decisions when used in combination with other forms of analytics. The most common use of social media analytics is gauging customer opinion to support marketing and customer engagement. And one should understand that these are mostly huge unstructured data. So, companies use this unstructured text data to track and analyse user sentiments for their product enhancement, customer service improvements and also to understand competitors’ move.
The first step is to determine your purposes for the social media involvement. That is, whether the purpose it is to improve public opinion of your company or products or say, lowering customer service costs or a combination of factors. It is then that you come up with a strategy and combine social media analytics tools with other traditional analytics to get the maximum benefits.
Which industries/verticals are more prominent in leveraging social media analytics?
Social media analytics should not be limited to any particular industry vertical as every business can benefit from this process. However, it is picking up fast in segments that have a greater customer interface such as e-commerce, travel and hospitality. These segments deal with more guests comments to improve repeat customer rates. However, a bank can also use social network profiles data to improve credit calculations, or an insurance company can use social media analysis for claims cost prediction and fraud detection. So it depends how businesses use this technique to reduce customer service cost, to get feedback, for crowdsourcing and for generating revenue.
Bad news moves fast on social media. Does social media analytics have room for damage control?
I believe social media has room for damage control. I’ll give you an example. Suppose you run a hotel and you have a one-star rating on a review site, or some discontented customers taking their complaints to Facebook, there are certainly ways to deal with it. It depends on how the company understands the issue and deals with it. It is important to have a proper management of your social media marketing. So, if you’ve got bad reviews in public forums like social media, ensure that you respond properly and quickly. A sincere participation and providing the right information can help a lot in damage control.
Social media analytics leads to increase in sales ROI and marketing activities. Which other business processes can leverage this technique to improve efficiency?
Until now social media analytics has been mostly used in marketing, like measuring the effectiveness of a campaign. But there are various other areas that can benefit from this type of analysis. Social media analytics, for example, can be used as an important data source to compliment traditional market research. One obvious area is CRM, where understanding the customers as influencers allows a firm to build messages accordingly. Social media analytics can be part of inventory management which can help you forecast demand and enable you to figure out how much inventory you’ll need. Human resource is another area where social media analytics can help in understanding and tracking employee attitude and behaviour.
A few CIOs still believe social media for business is just a passé. What is your do advice to them?
I believe that social media is here to stay and with more and more customers using it, you have no choice but to deal with it. However, companies must ensure that it is translated into a revenue mechanism and drive profit. For this, as I mentioned earlier, you need to support social media initiatives with both primary and secondary marketing research and draw a correlation. Being in analytics, I believe that social media analytics should not be seen as a standalone activity. Rather it should be viewed as part of a larger digital marketing strategy. So, it is definitely a powerful marketing tool. But its real benefit will become evident when combined with traditional analytics forms to explore greater business value and return on investment.
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